Investing in your future with Enoch Omololu

Mohammed: Let's get started and I'm super excited to learn from you and dive into this a little bit more as to talking and understanding investing, especially from a freelancer lens. So why don't we start by understanding what [it is] that you do as a freelancer?

Enoch: On the freelancing side, I am a personal finance blogger. And in addition to that, I also do some freelance writing for clients and pretty much anybody who wants something written in the personal finance realm.

Mohammed: And how did you get started on it? Were you just like, “Hey, I'm going to start writing and I'm going to write about finances”?

Enoch: Yeah. You know what? I think it goes back [a] bit for them that I've always been having a side gig or something to make money on the side forever. Starting from college where I did all kinds of retailing and got into doing phone repairs and writing and just all kinds of stuff to make ends meet.

So that's just been part of me forever. So my latest gig, which is blogging, freelance writing is just something I got into once I had some free time and I decided to turn it into a money-making venture. And that's how I got into this.

Mohammed: Okay. It sounds too simple. Walk me through this. So you started writing, you had some free time, you set up a blog. Did you know right off the bat that you were going to talk about personal finances and you could have talked about personal finances as a whole, but you chose to, of course, focus on the Canadian market.

Walk me through each of those decisions. How did you come to be like, “Hey, I'm going to start Savvy New Canadians and that's going to be talking about personal finances within Canada and ensuring that Canadians have better insights, better knowledge, [a] better understanding of what options are available to them.”

Enoch: Yeah so initially, actually back in 2012, I was doing a master's degree in economics and at the time, I just wanted to write about what I was learning and write about my trading adventures. At the time I was doing some day trading. So I just wanted to kind of document those things. So I started a blog.

Back then that was a different blog. And then once I lost my interest in that blog, I just — you write on and on for six months, nine months I think the subject matter got tiring and I wasn't doing too well with day trading. So there was not much to talk about at some point. 

And then, at that point in time as well, I was still fairly new in Canada. So I was just about, just over a year. So I started looking at all the things that I should get into. So TFSAs, RRSPs, those were new topics to me. I was just learning about them. And then I decided, “Well, I'm getting tired of writing about day trading and writing about the futures markets and equities and all of that stuff. Why don't I just start writing about Canadian personal finance?” 

One for me to summarize what I am learning about it. And then secondly, maybe I can redirect people who are asking me questions about “What should I put my investing money in? What's the TFSA about?” I am referring to all the newcomers to Canada. So at that point, I was trying to essentially reach two goals with one project: teach myself and then see if I can use it to help others as well. So that's how Savvy New Canadians began in the fall of 2016. 

So once I kind of got into that writing, writing, writing, of course, opportunities present themselves often in workloads so I saw an opportunity to take it a bit further and monetize the blog as a means of income, as well as a means of reaching out to teach others about personal finances in Canada. So really that's how Savvy New Canadians began. 

And then, for freelance writing, again, that was a natural evolution of the blog just doing much better. And people reaching out for essentially asking me, are you willing to write for a fee? And I took it up from there.

Mohammed: So you started writing the blog and when anyone starts a blog, you can only have so many articles to get started. Did you create 10 or, I don't know, however many articles before you launched the blog or were you just like, “I'm going to launch this blog and I'm going to have one post and I'm going to go from there.” What was that inception like?

Enoch: So I wasn't prepared for the inception. I wasn't super prepared [for the] launch date, 10 articles, all of that, no. Because [as] I mentioned earlier, I had already had all [these] blogging rodeos in the past. And what happens is you get stymied trying to over-prepare and once you launch it, you basically run out of steam.

So for Savvy New Canadians, I built it from the ground up. Back then just using a free theme initially, a free blogging theme based on WordPress. And I was writing as I was building it. So I started with just one article and that was the about me page.

I still remember having to clean out all the dummy pages through the first year because Google essentially took those pages and put them online.

Mohammed: Wow. Okay.

Enoch: So over time, I still remember having to clean out all the dummy pages through the first year because Google essentially took those pages and put them online. Even though they were all dummy pages with dummy texts — I wasn't so interested in cleaning them out. Initially, I was just writing, publishing and building the site. So it was an ultimate really at the beginning.

Mohammed: And so how far into writing and getting Savvy New Canadians up, did you start seeing people coming in or did you start promoting it somewhere? Did you go on to Personal Finance Canada Reddit and start sharing your articles there? What was that initial traction like?

Enoch: There was no traction for months. I think maybe the first few visitors started around [the] three-month mark. And then it started to go up from there. Just trickling in until about the 10-month mark, where I remember going viral for, I think it was an article on mortgages or something like that. And that's where the traffic started coming, at around the one year mark.

Mohammed: Hmm.

Enoch: Before then it was just me writing pretty much. I gave myself a target: write one at least once a week. So at least publish four posts a month. And often I did way more than that, but that was my minimum — four posts per month, one per week. And just keep writing. This is for the long haul.

Mohammed: And so you're writing, at least one article a week, if not more. One year mark comes up, October 27, 2017, comes around. You have an article about mortgages that goes viral. And then what happens? At what point did you start monetizing the blog and how did you monetize it?

Enoch: So the monetization was around the one year mark as well. And I think having that viral post was what really gave me the confidence to start monetizing. Initially, I started with Google AdSense, so that's just ads served through the Google platform and on the website. And that was pretty much it. Over time the blog has diverted into other methods of monetizing. So you have affiliate links, advertising and yeah. It's grown a lot, but initially, it was all taking things slow.

Mohammed: And I suppose since then, I mean, you've been on quite the growth stream I would say. And it's been very interesting to have a personal finance writer that is also not in Toronto or Ontario even. And I wonder, how has that been? Do you find you have a different perspective when you're approaching personal finance living in Alberta if I recall correctly?

Enoch: Winnipeg.

Mohammed: Oh, Winnipeg. Sorry!

Enoch: A much smaller place than 

Mohammed: Even smaller. Great.

Enoch: Even smaller.

Mohammed: Do you find that your thought process is a little bit different? Or do you think it's all the same just because everything's online now? So it's not that much disconnected.

Enoch: I think it's the same in the sense that everybody's basically getting their opinions and ideas, really from the same places. That said, I think it's a bit tougher when you're in a place like Winnipeg, for example, where you're really off the radar for most people. And you get a lot less free publicity to start. You get a lot [fewer] opportunities to network with people who are just around the area who are close by, who you meet in the same meeting points like conferences or stuff like that. It's a bit more challenging just because you are really on your own. So it takes a lot more determination to push things through.

Mohammed: And going back to something you said before about day trading and futures, and you realized that that was not for you. At what point did you switch over from doing day trading and futures to focusing on actual investing for the long run?

Enoch: So that again was more so around the time. I think it was between the intervening period of 2012 and 2016. So between 2012 and 2016, I underwent a lot of learnings about investing in a more specific sense. Previously, I understood investing in general, but I think I was more, more so interested in hitting it big and that often comes with people who day trade.

You want to hit it big and make quick money and enter into financial markets. Often, it doesn't turn out the way you want it to be. It's very high-risk. There are more losers than winners and if you don't get yourself on track on time, you could lose your shirt. So between 2012 and 2016, which is around the time I blogged about day trading, I kind of realized that I needed to focus more on longer-term investing.

And that comes with also having a child, getting married and all of that. So that four year period I think was my transition from alternative non-traditional investing to more so traditional, hassle-free, safer, and more my opinion, more profitable investing strategies. And that's probably one of the reasons why I started writing about things like TFSAs and RRSPs. 

In the past, I wouldn't have thought about them too much because I was more interested in taxable accounts. Personal taxable accounts; non-registered. Just investing and cashing in as quickly as I can.

One of the most common things I come across is people just feel, “You know what? I would have to delay investing until later when I started making the big bucks.”

Mohammed: And so now, you know, you've had this sort of shift in your mindset in terms of how you want to invest. You are writing about personal finance on your blog Savvy New Canadians. You're starting to get quite a bit of traction from all sorts. You're monetizing. I'm sure over the past four years now, you've likely come across people, especially self-employed people, who perhaps have a misconception about investing.

I'd love to know what are the misconceptions that Canadian freelancers tend to have about investing?

Enoch: Misconceptions in the investing world, and it applies to not just the freelancers. It's a widespread problem. It's a pandemic in some sense. So some of the misconceptions actually would include things like people just feeling they don't have enough money to spare to invest. So that's one of the most common things I come across is people just feel, “You know what? I would have to delay investing until later when I started making the big bucks.” 

That's a problem because one is, time is not on your side. Time's on your side when you start investing today. When you delay, it doesn't matter how much you are going to invest in the future, time would work against you. So what I tell people is start with what you have. If it's five bucks, five bucks per week, five bucks per day, whatever it is, compounding returns over time — the time value of money and the compounding returns over time can make even your small investments, a lot bigger in the future.

The other thing I also come across is — a misconception — people think it's too risky out there. And I know about risk because I have traded, I like fast-moving — even if you chose losing thousands of dollars in a day or [making] thousands of dollars in a day. So I know about risk, but the thing is there's no return without taking some risks. So if you're looking for getting any return or increasing your net worth, you should be taking some risks and that includes investment risks in the financial markets. 

Something else people also feel is “I don't have the time. It takes a lot of research, analysis to make money in the financial markets. I just don't have the time.” Again, you don't need to put in a lot of time to invest. You should be maximizing your opportunities out there that are already basically pre-packaged for you to invest. You don't have to do all the research on your own. You don't have to understand the individual stocks.

One concept in investing is to invest in what you understand. So if you don't understand those assets in a way, then you should be using the services of those who understand those things so that you can save your time and expend it elsewhere. 

Again, that also goes into the other misconception, which is knowledge. I don't have [any] knowledge. It's a lot of jargon. It's complicated. Use the service of those who have done the work already and leverage on that. 

Sometimes I come across those who feel they are too young. I can think about investing, saving for retirement in the next five years, 10 years, when I get married, when I'm older. Start now, use compounding interests to your advantage. They say it's um...  

Mohammed: The eighth wonder.

Enoch: Exactly! You got that right on there. So it's the eighth wonder in the world. Why don't you use it to your advantage? Let it work for you on the back end and you will be surprised how much you can gain [by] just using [the] time to your advantage. Just the years passing by. And your money just keeps increasing year on year into the future.

And then the last thing comes to mind is people think, “You know what? I'm going to lose money.” Well, that's reality. That's life. You may lose money and the risk of losing money is actually what exposes you to the potential of making a lot more money by investing in the financial markets.

So I tell people to just start. Trying to get it all perfect from the beginning often leads you just getting bogged down with information and you end up not doing anything. So start with something and then ramp it up from there.

Mohammed: And I suppose, looking at all these misconceptions and feeling overwhelmed by all these choices, but then all these decisions and then all these concerns and so much going on. What are some small steps Canadian freelancers can take to get started with investing?

Enoch: So I think the first step is to start. And that would include doing some research into what's available out there. So for example, in Canada, we have [a] tax-free savings account. That account doesn't need you to have earned money to invest in it. But as a freelancer, you're making some money, maybe not a lot, maybe a lot, but the TFSA is open to everyone.

So you can start investing, using a TFSA account. What that means is you get a contribution room every year. For 2020, the maximum contribution limit for the TFSA is $6,000. Freelancers who have been eligible to invest in a TFSA since its inception in 2009 have at least the total contribution room of $69,500. So start with an account like TFSA. Your returns are tax-free for life.

Now, what can you invest in your TFSA? You can look at all kinds of investments. Start with the simplest form of investing, which would just go into your bank and sign up for a mutual fund. Alternatively, you can look for other fee-friendly investments like index funds, robo-advisors. If you have the time and the knowledge and the confidence, you can use a discount broker and buy assets directly on a brokerage platform. 

So I tell people to just start. Trying to get it all perfect from the beginning often leads you just getting bogged down with information and you end up not doing anything. So start with something and then ramp it up from there. 

In addition to the TFSA, you also have the registered retirement savings plan, which is the RRSP for short. So if you have an income, you get a contribution room for your RRSP every year — 18% of your earned income up to your maximum. If you've maxed out your TFSA, use your RRSP; invest in that. I mean, there are nuances in the RRSP versus the TFSA where one may be better than the other, but you know what? For beginners, don't get yourself too bogged down. Invest in one account; start a registered account.

Mohammed: And, walk me through the complexity of it. People listening to this, they will think, “Do I go to my bank? Do I look into this online to kind of like find the best rate of which RRSP is the best one and which bank or service provider has it?” What are some resources perhaps that Canadian freelancers can look at to get an understanding of like, “Okay, here's where I think I can get started with an investment account.”

Enoch: Well, you know what? That's why I am here. And if — really any freelancer watching and wants to know what, what account to invest in, just simply visit savvynewcanadians.com. It's all there. I can promise you that. On a more serious note, I think your question is valid and I get it a lot. From newcomers, from people who have been here all their lives, I get that question a lot. Where do I start? 

So, for example, let's take the TFSA you have all kinds of accounts you can open with your TFSA. You have a mutual fund account; just get one through your bank's website. Book an appointment with a financial advisor, an investment advisor. They're going to ask you some questions — KYC — to test your risk tolerance, your investment objectives, your investment horizon, like the timeframe when you are going to need your money. 

And then based on your answers, they recommend a portfolio for you. Now, if you want to save some money because mutual funds can be a bit expensive, you can visit a bank like Tangerine, they have investment funds that are — we call them the index funds. They're just slightly cheaper because there's less activity going on there. And you can get all of these done online. You don't have to actually walk into any branch. 

The same thing happens; you go through a questionnaire online. It assesses your risk tolerance, your investment needs and recommends a portfolio for you. Now you can even make your life much simpler, go with a robo-advisor. Same process, slightly cheaper. Take you through the online questionnaire and recommend a portfolio for you. 

Now if [you want] to step it up a bit, then you can also try and learn about analyzing stocks, analyzing ETFs, taking a look at what their returns performance is over time and all of that stuff and go into dividend investing, buy stocks on a brokerage platform. There are lots of them in Canada — discount brokerage platforms — like Wealthsimple Trade, Questrade. This saves you even more money if you know what you're doing. 

So a combination of these or just one of them works in your TFSA account. The same applies to an RRSP, and you can even start with a savings account that is just a TFSA savings account, in the sense of savings. So just money in the account and interest. The thing is, start from somewhere. Don't just stick the money in your [chequing account], and it goes in, it goes out. It's not growing; it's not getting you any returns.

Mohammed: And of those options that you mentioned there were about four. So one was to go to your bank, have your bank rep open up an account for you and get you started. And that will likely be a mutual fund. The second option was going to a service like Tangerine that has a brokerage account and purchasing ETFs or similar products yourself. The third option was robo-advisors and having them put your investing on autopilot. And the fourth option was learning to invest yourself.

Did I capture all those? Right.

Enoch: Yeah, absolutely.

If the market goes up, your funds go up. [The] market goes down, well sorry your funds also go down. But that's, that's the reality of investing. It's just in and out, in and out. Over time you are making money because historically the markets always trend up.

Mohammed: Okay, so of those four options, which one is the no brainer to get me started in less than an hour?

Enoch: So I call the robo-advisors the middle ground. So they are essentially the middle point between traditional investing and do it yourself. So a robo-advisor is, for simplicity, what anyone can get into. You go online — you don't speak to anyone at all, ever. Go online, sign up there, go through the questionnaire, transfer funds from your bank account, get invested, just watch your account grow. 

You don't have to think about rebalancing. Okay, [are] my asset allocations off track? Do I need to buy more of these? When to buy more of that? You don't have to think of all of that. These services are providing financial advice, they're doing the rebalancing, they are doing the market research, and essentially they're mostly passive. So even they are not doing a lot of work. It's set up by default to simply track the market. 

If the market goes up, your funds go up. [The] market goes down, well sorry your funds also go down. But that's, that's the reality of investing. It's just in and out, in and out. Over time you are making money because historically the markets always trend up.

Mohammed: Yes, up into the right. Perfect. And so, here I am. I've got, maybe let's say $10 per week that I want to contribute because I'm no longer going to that coffee shop I like and so I decided I'm going to go to Savvy New Canadians, I'm going to look up [the] investing section, scroll down to robo-advisors. And from there I'm going to pick one that makes the most sense for me.

And now I create an account, I start my weekly contributions of $10 per week, about $520 per year and I just watch my money grow — maybe slowly sometimes than others, but it's growing and [the] eighth wonder of the world — compounding interest — is going to work in my favour over the next 30, 40 however many years. Did I capture all of that? Right.

Enoch: Yes, you did perfectly. That's it in a nutshell. It's just “Wait for the wonders to happen.”

Mohammed: Right. So now that I've started investing, my money is working for me; investing is on autopilot. Okay. I'm not thinking much about it. But at the same time, let's say stuff like March happens where all the stocks are falling. S&P is down by X hundred percent. Gold is up high. Everyone is just like noise. Right? 

What happens? What do I do? What are some mistakes freelancers make or people make when it comes to investing?

Enoch: So the first thing is don't try to predict the market. Just don't try it. The market does what it wants. You have all kinds of talking heads on radio, on TV, all making predictions here and there. You know what? They are all wrong, more so than when they are right. And they don't really know because if they did know, they wouldn't be telling you they [would] be [taking] advantage themselves. 

So yeah, when it comes to the financial markets, you want to tune out everything. I rarely visit my portfolio. Maybe four times a year, five maybe. I don't care what's going on in the financial markets. Once you set up right from the beginning, it's set and forget. So keep things simple. Don't start with assets or trading strategies that make your blood pressure wrong all day long. 

And when I say that, I'm referring to day trading. I think I was just living off the highs back in the day, the adrenaline junkie. Markets are going up and you're like, “Ooh, it's great today.”

And then [the] next day, you're basically down to earth and feeling all depressed because you lost everything. So avoid things like day trading when you can. Some people make it in their trading. It's not a lot of people. It's the 1% really. The other thing you want to also look out for is [to] avoid paying high fees. 

I can show you the evolution of my trading. So initially I was a day trader and then once I kind of came to [the] reality that, “You know what? This is not going to take me anywhere. Not in the near term and maybe not in the long term.” I moved over to mutual funds. So [I] went to my bank, opened a mutual fund account, and I was just putting money in there. 

Back then, it was around 2013-ish. I remember I was paying around 2.35% in fees on that particular growth account I had then. So back then, I wasn't willing to spend any time thinking about investing. I got burned so I was like, “Just put money in there and forget about it.”

Then as I started learning about personal finances, I'm like “Okay, you know what? I can cut this down.” Then I moved to an index fund with Tangerine. I was paying 1.07%.

Mohammed: Mm.

Enoch: And then I had more time on my hands at some point. So I started digging more into this stuff and then I moved my funds into a one ticket fund.

So most of my portfolio right now is in one-ticket funds. And what that means is you're buying an ETF portfolio that essentially doesn't need rebalancing, doesn't need all of this, trying to allocate assets and stuff like that. It's already set up to be in line with your investment objectives, your risk tolerance and your timeframe. 

So that was the evolution for me. I also trade individual stocks, dividend stocks, but to a minimum. So to make my point, keep things simple. Avoid high fees when you can. And that may take some time if you're starting with mutual funds and then progressing as you kind of get more comfortable with investing — or just go straight to robo-advisor and just save yourself the stress. 

And also avoid chasing returns. Sometimes you have people trying to pick stocks. It may work. It may not work. Trying to look for the next thing that's gonna blow up and shake the markets and have the highest returns — I also do that, but I use basically my gambling money to do all that kind of stuff. I don't use my main assets. It's a negligible portion of my net worth that goes into non-traditional alternative assets. I don't do that. 

So [with] cryptocurrencies, I wouldn't say someone should not trade cryptocurrencies. Just don't trade it with your retirement funds. So chasing every new thing that comes up and promises you high returns, you should understand that is what we call in finance the risk-return trade-off. The higher the risk, the higher the expected returns. The lower the risk. Well, the lower, the expected return. 

So if you are chasing something that is promising you 20% returns per year, trust me the risks are very, very high.

Mohammed: You've identified all these risks and some people are like, “Well, robo-advisors seems like a pretty simple thing I can get started tomorrow.” At the same time, I feel some people shouldn’t be investing right now and should be allocating their money elsewhere. In your experience, is it good for everyone to just go ahead and invest? Or are there people that should not be investing, at least right now?

Enoch: If you are carrying a credit card debt or any high-interest debt, you shouldn't be investing. Any funds you can spare should be going towards paying down that balance as soon as possible. Because one thing is the financial markets will likely not pay you 19.99% per year in returns. So it just makes sense for you to try and settle that debt as soon as possible. 

So, yeah, what I tell people is if you have credit card debt or you have a personal loan that is, the interest rate is extremely high, or even medium — like if you're paying 7%, maybe you still want to pay off that debt ASAP. Then you should probably not consider investing until you've dealt with that. 

Things like mortgages and the likes, I don't consider those to count in this sense. I would still say go ahead and invest starting today and continue paying your mortgage rate as you have been normally required to. And maybe not try to accelerate your payments unless you've maxed out your TFSAs and your RRSPs and then you can amp up your debt payments so that you can get that out of the way as well. 

But overall, everybody should be investing at some point. And as soon as they can start, the better because investing essentially is making your money work for you. So you are working to make money, but then investing is you paying yourself back and making money work for you.

I tell my friends, “You can cut your expenses just so much. At the end of the day, if you want to improve your finances, you probably want to increase your income.”

Mohammed: And we've already covered Savvy New Canadians and that being the launch board for all investment-related articles and information and which tools people should be trying, or at least getting started with. Outside of that, I'd love to know what advice you have for Canadian freelancers as they start thinking about investing?

Enoch: My advice is two-fold. The first one we discussed at length already, which is [to] invest money in an investment account so that you can start creating net worth for yourself and your future. The other aspect [of] investing is investing in yourself as well. And that's one thing I have tried to do all my life. Investing in yourself means you're increasing your skills, your abilities, you are expanding your horizons so that you can be better. And when you are much better at what you do, then you can also charge a lot more and you can make a lot more money. 

I tell my friends, “You can cut your expenses just so much. At the end of the day, if you want to improve your finances, you probably want to increase your income.” So the other aspect [of] investing in yourself is when you've invested in yourself, then don't shortchange yourself. So for example, I'm a veterinarian by profession. But even as a veterinarian, I did take some time out to get a master's degree in finance and investment. 

That was first and foremost for my own interest. And then secondly, it helps when somebody who has some knowledge, some formal knowledge of the subject matter, actually talks about it. And so when I have invested that much effort into educating myself, then I don't short change myself. So I don't write for free, I don't try it for cheap. So invest in yourself and then ramp up your value as well. Don't shortchange yourself. Charge for the value that you're offering. 

And the advice for freelancers is [to] start small and think big. Start with what you have right now, but then think big. You can expand even bigger than what you are right now. Go for your goals, go for your dreams, try and get it done. But I've come across people who just, they short change themselves.

It's “Well, I'm a freelancer. What I get paid is what I get paid. I just have to live with it and manage that.” No, I turn down clients all the time. One, because my time is valuable. I have very limited time to do anything. And so the next time I have to get stuff done, I make sure it's worth my time.

So it's a mindset. I think people really need to kind of get into and people feed off of that. They know when you don't have much value for yourself and they pay you just as much. And they actually know when you are providing value and where you believe in yourself. People tend to fall in line when you at least stick to your guns.

Mohammed: I like that a lot. Well, Enoch, it's been lovely talking to you and learning from you. I really appreciate this conversation. I'd love to know where people can find out more about you and your work online.

Enoch: Yeah, so my main presence online is actually through my website at savvynewcanadians.com. I also have social media platforms. And, I have to say I'm not very active on them, but you can find me on Twitter, Facebook, Pinterest, and even Instagram. I would — yeah, like really — if you want to contact me or get some insights from me, it will be on savvynewcanadians.com.

Mohammed: Well, thank you so much. I really appreciate this opportunity to learn from you.

Enoch: You're welcome.